City OKs MDC incentive to Agri-Empresa

Published 4:19 pm, Tuesday, October 9, 2012

The City Council on Tuesday unanimously approved the Midland Development Corp. providing a $524,500 incentive to Agri-Empresa for its $8.7 million intermodal rail facility.

The incentive money will be used to build two railroad crossing points that are required by Union Pacific for the creation of Agri-Empresa's intermodal facility on Industrial Avenue, according to the agreement. Associated costs the incentive will cover include design, crossing arms and lights, crossing track and panels, and asphalt removal and replacement for the project.

Agri-Empresa and Union Pacific worked together two years to bring the plan to fruition, according to Agri-Empresa President Steve Goree.

Pam Welch, executive director of MDC, said in August that Agri-Empresa approached the MDC during the summer about whether it could partner with the company as it works to install infrastructure for the intermodal rail facility.

The facility will provide an off-loading point in Midland for building and oilfield-related materials brought to the Permian Basin.

City staff originally recommended that an annexation into the city limits be a part of the economic development agreement. But the 81-acre tract of land in question is in an area that already is part of an agreement with the city that allows it to avoid annexation for seven years. Goree said his company recently granted Schlumberger all of the easements on its property to obtain water from the city, under the condition that the land would not be annexed.

Still, the discussion brought up a more theoretical discussion about whether MDC funds should be used only on projects that are within the city limits. The corporation was formed more than a decade ago to offer incentives for new and existing employers who create jobs for the community, and is funded by a quarter-cent sales tax rate increase with additional revenues.

"We have to balance the investment that the MDC makes with the return on investment that the citizens of Midland get," Councilman John James said.

Even if the project does not happen within city limits, the city will benefit from it, MDC Board member Gary Douglas said. There is also a possibility for five to 10 new jobs, Goree said.

Maintenace on the two railroad crossings will be performed using state dollars, not city dollars, Douglas said.

For Agri-Empresa, it was important to keep the city of Midland in mind while making plans, Goree said. Many other areas, like Hobbs, N.M., and Seagraves, are doing similar projects, but in outlying areas, he said.

"A land tract available close to the rail that makes it feasible in the first place, that's hard to find," Goree said. "This is where we're based, in Midland. Obviously we want to be able to provide these services in Midland-Odessa."

In other business, council members authorized the appropriation of $41,600 toward the Home Investment Partnership Program Reservation System Participant (RSP) Program for low-income homebuyer assistance. Up to $20,000, plus $800 in administration fees per project, will be provided on a case-by-case basis for homes that are privately built and purchased by a mortgage-approved buyer anywhere in the city, according to the resolution.

In other business, council members authorized the appropriation of $41,600 toward the Home Investment Partnership Program Reservation System Participant (RSP) Program for low-income homebuyer assistance. Up to $20,000, plus $800 in administration fees per project, will be provided on a case-by-case basis for homes that are privately built and purchased by a mortgage-approved buyer anywhere in the city, according to the resolution.

The $41,600 provides short-term upfront financing of the expenses, which will be reimbursed by the state through the Texas Department of Housing and Community Affairs RSP program, Sylvester Cantu, Community Development manager, said.

"Since it is case-by-case, we're going to have to go in front of you each time," Cantu said to the council.

"It's very limited, and not enough money to really get somebody into a house given our situation right now," he said. "It's not enough to put a dent in the situation."

The council also:

-- Held a public hearing on permits by Bluestem Energy Holdings and Rust Oil Corp. to drill oil and gas wells within city limits -- on the east side of North Midland Drive north of Mockingbird Lane, and on the west side of the extension of North Garfield Street north of Mockingbird Lane, respectively.

The Rust Oil Corp. well would be located approximately 760 feet to the east of the new Midland Bible Church currently under construction, according to staff, and is located near Mayor Wes Perry's house and Midland Classical Academy. Perry left the council chambers during discussion on the plans.

Resident Chris McIntosh expressed his concern about the possible well.

"It's a brand new, developing area," he said.

The permits will be brought back to the council after a required waiting period of 30 days.

-- Gave unanimous approval to Weidner Apartment Homes for zoning that will allow the company to construct a 290-unit complex near Wadley Avenue and Loop 250. Weidner brought a sight line study before council members to assure them that the planned three-story buildings will not allow renters to see into nearby yards.

-- Gave final approval to Insignia Hospitality Group for a zone change in regards to a Holiday Inn Express planned for the north side of Crump Street, just west of Rankin Highway. Engineers working on the project have said that the group has future plans to add a second hotel on Crump Street.

-- Reappointed Elvin Brownlee III of Andrews and Luis E. Elguezabal of San Angelo to the Permian Basin Airport Board; reappointed Pete Hulder and John Kennedy to the Tax Increment Reinvestment Zone board; and appointed Ken Burgess to the TIRZ board.